India till now is not a mature market (at least to my knowledge) as far as maintaining credit rating of individuals is concerned. There has been many instances of people defaulting on their credit card payments, loan payments etc...but are still not that very adversely affected by the same.
All this is about to change.
Economic Times reports, India’s credit bureau, set up by Citigroup, ICICI Bank and other lenders, will begin grading 100 million borrowers from November to help banks curb defaults and creditworthy customers pay lower interest rates. The Credit Information Bureau of India (Cibil) will evaluate ages, salaries and existing loans to assign individual ratings, chairman S Santhanakrishnan said. Multiple applications or using one credit card to repay another will result in lower grades and higher borrowing costs
What this means is that it will become more and more difficult for people with low credit rating to get loans when required. And no longer you can afford to be lax with respect to payment of credit card dues. It is in a way good for the economy.Hopefully there will be a mechanism by which intentional screening of individuals by banks can be regulated. For eg. I know that ICICI bank has the notion that credit cards should not be provided for Journalists since they form in the high risk category.
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